Started trading about two years ago. Made all the rookie mistakes, and lost $10K+. I didn't declare in taxes, assuming that a negative income is of no interest to CRA. However, the turnaround seems to be happening, and I hope to make small profit by years' end, and hopefully more next year. My question is: can I carry last year's loss to this year's (or next year's) profits, and write off the loss against anything I make (until my profits exceed my loss of last year)? Any insight appreciated, thanks in advance.
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Reporting a loss (Canada) - Carry over?
- Thread starter ashkelon
- Start date
Yes you can carry forward losses indefinitely. See this link for details:
https://turbotax.intuit.ca/tips/carrying-capital-losses-backward-or-forward-6249
https://turbotax.intuit.ca/tips/carrying-capital-losses-backward-or-forward-6249
Yes you can carry forward losses indefinitely. See this link for details:
https://turbotax.intuit.ca/tips/carrying-capital-losses-backward-or-forward-6249
Thanks for the reply. However, because of my frequency and type of trading, I won't be filing under 'capital gains/loss'; this category, as I understand it, is for investment-type income. Since I trade frequently, probably thousands of trades a year, I think CRA wouldn't allow this. Therefore I will need to declare any income as a business income. But what about losses? Assuming that people who own businesses can also on occasion incur years of negative income. Are they then able to carry forward losses to future years?
I'm pretty sure you can carry business losses forward indefinitely as well. Keep in mind that the CRA will start to question the business if you're always showing losses. Check with an accountant to be sure.
In terms of capital gains it's definitely beneficial to claim gains this way due to the lower tax treatment. I'm not a day trader but I place a lot of trades every year and always claim them as capital gains. Depends on your situation.
In terms of capital gains it's definitely beneficial to claim gains this way due to the lower tax treatment. I'm not a day trader but I place a lot of trades every year and always claim them as capital gains. Depends on your situation.
I'm pretty sure you can carry business losses forward indefinitely as well. Keep in mind that the CRA will start to question the business if you're always showing losses. Check with an accountant to be sure.
In terms of capital gains it's definitely beneficial to claim gains this way due to the lower tax treatment. I'm not a day trader but I place a lot of trades every year and always claim them as capital gains. Depends on your situation.
Gary, just curious what kind of trading volume Or number of trades you turn over on capital gains reporting. Have you filed the T123 election? I took some defensive positions that have paid off well, mostly in my $us trading account and am concerned about those being tagged as income instead of capital gainns for 2020. Historically I’ve always claimed capital gains/losses and have never had any problems with that from CRA. Google searches do not come up any consistent results of course! Seems like if your not in the securities industry, and consistent with how you report gains and losses they don’t seem to reassess.
Gary, just curious what kind of trading volume Or number of trades you turn over on capital gains reporting. Have you filed the T123 election? I took some defensive positions that have paid off well, mostly in my $us trading account and am concerned about those being tagged as income instead of capital gainns for 2020. Historically I’ve always claimed capital gains/losses and have never had any problems with that from CRA. Google searches do not come up any consistent results of course! Seems like if your not in the securities industry, and consistent with how you report gains and losses they don’t seem to reassess.
Outwest, my trading volume hasn't been excessive maybe 200 trades per year. I haven't filed a T123 as this election is only for Canadian securities and more than half of my trades are in US stocks and my more active strategies are in US stocks. The CRA rules for declaring someone a day trader are very loose and not well defined. It looks to me like it's on a case by case basis. If the number of trades you are doing is not excessive I don't think you have anything to worry about.
Thanks Gary. I am on track to trade about 30-40 trades per month on my US account, and some of those are “Canadian resident companies” that qualify for T123 capital gains inclusion, so probably about 15 trades per month on foreign companies. I filed the T123 as it also includes short sales of Canadian companies as capital gains/loss and that’s a big win for me this year so far. I have a few outsized and unrealized gains in some US options and am just a bit nervous about how those may be classified, although the general guidance is that they are taxed as per the shares held in that same account so it should be fine too. Happy trading!